I'm headed to Washington, DC, next week for the Insurance Information Institute's Town Hall on "Attacking the Risk Crisis" and took the occasion to chat with Triple-I CEO Sean Kevelighan about the climate-related issues that will be the focus.
I hope to see many of you there. (You can register here. Use the code WELCOMEITL, and you'll receive a $200 discount off the non-member price.)
The event is a compressed, single-afternoon affair, designed to generate action items for the insurance industry while creating opportunities for networking and for attendees to conduct other business in DC while they're there. Representatives from various federal agencies, as well as from think tanks such as the Brookings Institution, will be there, because discussions will straddle the roles of the insurance industry and of public policy.
While I encourage you to attend the event, or at least to read my full interview with Sean, I'll share some highlights here.
Because climate change is such an existential issue for humankind, writ large, as well as for the insurance industry, we at ITL have been leaning into the search for innovations for many years. For instance, here is a thought-provoking webinar I conducted recently with Sean and with Francis Bouchard, managing director, climate, at Marsh, as part of our Future of Risk series. On my own time, I got deeply into potential solutions in my most recent book (written with Chunka Mui and Tim Andrews), "A Brief History of a Perfect Future: Inventing the World We Can Proudly Leave Our Kids by 2050." So, I was delighted to see that climate risk is the focus of the Town Hall (including in a panel moderated by David Wessel, a longtime colleague of mine at the Wall Street Journal who is now a senior fellow at the Brookings Institution.)
Sean said a major goal of the Town Hall is to identify ways to change behavior by helping people understand the risks of buying or building a house or commercial property early in the process, rather than after they've committed. In other words, don't wait until I'm signing on the dotted line to tell me that a property is at risk from major storms and flooding or wildfires and that I'm going to have to pay astronomical insurance premiums. Tell me early in my search for a place to live or invest. Steer people away from places that put them in harm's way.
He said he hopes the industry and policy makers will rally around programs such as Fortified, which Alabama has embraced and which sets standards that make buildings far more resilient, even in the face of the hurricanes that hit the Gulf Coast.
We also talked quite a bit about the need for legal reform, so insurers can price risk fairly in vulnerable states such as Florida and California, where many insurers have pulled out of the homeowners market. Sean sees real progress in Florida, though it will take time to clear through all the lawsuits there. He is less optimistic about California and Louisiana, where the work toward legal reform is in much earlier stages.
Climate risk is a massive problem that won't be solved in an afternoon, but here's hoping we at least see some progress next week.
Cheers,
Paul